Posted by Chester Morton / Wednesday, 18 October 2017 / No comments
Types of co-operative societies
TYPES OF CO-OPERATIVE SOCIETIES
Definition of a co-operative society
Co-operatives describes a form of business organisations where a group of consumers or producers come together voluntarily or out of their free will to form an association with the aim to produce, distribute or consume a particular good or service. A co-operative can therefore be seen both as a business organization and an association.
In a co-operative, the owners are united often by the fact that they have a common interest. One main reason why people form co-operative is because they believe that by coming together, they can better protect their interest.
TYPE CO-OPERATIVE SOCIETIES
Consumers Co-operative
In a consumer co-operative society, members organize themselves into wholesalers and retailers of the product they are interested in consuming. Because they form a unit which buys in large quantities, they may be given discounts (price reduction). This helps to lower the price at which members of the consumer co-operative buy the good at the retail point.
Producer co-operative
A producer co-operative describes a co-operative society where the members bring their resources together, and organize themselves to produce a good or service. An Example could be the Co-operative Poultry Farmers’ Association or the Co-operative Distillers Association.
Agricultural Co-operative Society
This kind of co-operative is similar to producer co-operative in that they are mainly engaged in producing goods and services. However, with an Agricultural Co-operative Society focus is mainly on farming ventures. Sometimes members of an Agricultural co-operative helps other members on their farms on a rotational base.
Marketing Co-operative Society
A Marketing Co-operative organize its members to sell a particular good or service to the public, to government or to a particular type of business organization such as hotels, restaurant operators or farmers. Some Marketing Co-operatives buy goods on behalf of marketing boards where they can negotiate better prices for the goods they buy. This way marketing co-operatives are acting purely as agents for their clients. In return the co-operative is paid commission for this service. Other times marketing co-operative can act as sales agents. In this case their aim would be to bargain for higher prices for their clients.
Credit and Loans Co-operative Society
This may be formed by traders, farmers or a group of artisans (carpenters, masons, tailors etc). In this kind of co-operative, members contribute into a common account. When a member of the co-operative is in need of a financial assistance, he may obtain a loan from this common account. Credit and loan Co-operatives are sometimes simply referred to as Credit Unions.
